GEA touts $100M investment, but union leader worries about future

At the end of the production line for GE Appliances’ new top-load washing machine, workers close the drain access box. The innovative carousel can be seen at top right, in blue and red. | Photo by Boris Ladwig

Near the end of the new top-load washing machine line at GE Appliances, a conveyor carousel carries parts in front of production workers at eye level, allowing them to easily grab them and move them a few inches lower to install them on the machine’s control panel.

The conveyor carousel eliminates the need for employees to turn around and dig through boxes, then turn around again to install the parts. It also requires no additional power, because it is propelled by the same conveyor that moves the washing machine.

It’s a new approach GEA is taking to ease the work, improve the workflow, reduce errors and cut down on clutter in the plant.

The improvements, part of a $30 million investment in a new high-end refrigerator line, came about in part because of collaboration between managers, engineers and operators who began preparing for the new product launch about a year ago, said Michael Land, quality leader for appliances. The company also improved the new line thanks to lessons it learned from two other washing machine lines it installed in the last couple of years.

The new machine, the GTW750, offers five cubic feet of capacity, Wi-Fi connectivity and an automatic detergent dispensing system. A reservoir on the underside of the lid can hold up to 75 ounces of detergent, and based on the load, the machine automatically dispenses sufficient detergent.

The collaborative approach, the use of production innovations, the implementation of best practices and the product diversification already are producing positive results. Land said the number of warrant calls the company has received for its washing machines, in percentage terms, has fallen by double digits.

The new washer retails for $799, significantly more expensive than the company’s lower-end models, which start at $449.

“Hopefully, you can make more money at the high end,” said Peter Pepe, vice president of clothes care.

The company expects that its foray into the higher-end market also will allow it to capture market share and help it achieve its internally stated goal to double sales by 2022. The $30 million investment into the dishwasher is part of a $100 million investment into Appliance Park, but a spokeswoman said that the company is investing in other production facilities as well.

GEA officials said the investments speak to the company’s commitments to the Louisville operations, one of four in North America, but a local union leader said that since the new Chinese owners took over, they have moved products out of the park, which has depressed jobs numbers and does not bode well for the park’s future.

GE in January 2016 agreed to sell its appliances division to China-based Qingdao Haier for $5.4 billion.

Uncertainty

Dana Crittendon

“We went through a sale, and there’s still a lot of unknowns about job security,” said Dana Crittendon, president of the IUE-CWA Local 83761, which represents the park’s hourly workers.

The investments, to which the company agreed in a labor contract the parties reached in January, are nice, he said, but for the most part, the new production lines are replacements — not additions.

“I’m always asking about bringing something in, but I’ve been told that the business has no plans as of yet,” Crittendon said.

Despite company leaders’ assurances about their commitment to Louisville, they have moved products out of the park, he said.

In late July, GE Appliances said that despite union objections it would move a supply chain company back into the park, displacing 140 GEA workers who make hotel air-conditioners. In summer 2016, the company had said it would outsource warehousing operations to cut costs and cease productions of an unpopular high-tech water heater.

In both cases, the company said the workers would be moved elsewhere in the park, but Crittendon said that moving production out the park without bringing in new products still amounted to a job reduction.

Union membership has fallen by about 200 in the last year, and likely will fall further once the air-conditioning line has been moved.

For the union members, it feels like a death by a thousand cuts. Workers on the production floor have told him that they worry about how many years their jobs will remain in Louisville, Crittendon said.

“It’s kind of like a dark cloud over your head,” he said. “It’s painful, not knowing that you have job security.”

The atmosphere also is making it difficult to attract and retain experienced employees, the union president said. Starting pay at $12, which was lowered in the last contract from $15.52, also is keeping employees away. Years ago when GEA advertised for open jobs, the company would get thousands of applicants within minutes. Today, it won’t even get that many in several weeks, Crittendon said.

“It’s not like it used to be,” he said.

Those dynamics are keeping potential employees away and are prompting current employees to seek their fortunes elsewhere, meaning production lines are short-staffed, requiring remaining workers to do more work. A lot of the production workers are putting in 10 hours per day and some weekends, which is keeping them away from family, Crittendon said.

That, too, does not help morale, he said.

‘Change is here’

The discontinued water heater. | Photo by Boris Ladwig

While the investments are needed and the company has taken some good steps to improve the company’s products, Crittendon said leaders could signal their commitment to Louisville by adding a product to Appliance Park.

Company leaders, meanwhile, say their investments speak to their commitment. Pepe said Friday that $30 million GEA invested into the new washing machine line should serve as an affirmation of that commitment.

At the same time, GEA leaders have said that changes need to be made, because Appliance Park is the only one of the production locations that is not producing a profit. Workers at the three other locations are not represented by unions.

The loss of the corporate parent, GE, is posing challenges. Appliances are a high volume, low margin business, and without GE’s financial clout, the appliance unit’s lower margins are putting pressure on employee compensation and prices.

Crittendon said he understands that changes are necessary. Union members “need to understand that change is here,” he said, but company leaders, too, need to question their approaches.

Plans to double sales sound good, he said, but company leaders need to place a greater emphasis on innovation and advertisement to prevent the iconic GE brand from losing more of its luster.

For example, he said, competitors for years had been offering refrigerators with freezers at the bottom before GEA released its model. And whenever he sees appliance advertisements on TV or online, they tend to be from competitors, he said.

“I just feel we’re falling behind because we’re not aggressive enough in those areas,” he said.